The theory of Rational Addiction was first introduced by Kevin M. Murphy and Nobel laureate Gary Becker in 1988. The theory provides an economists’ view of addiction, from a perspective of costs vs. benefits. While the theory has been controversial throughout the years, the basic economic data surrounding the theory has proven sound.
How does it Work?
The basics of the Rational Addiction theory are this: An addict chooses a behavior based on the benefits he receives from that behavior. He weighs those benefits against both past consumption and the forward-looking costs of the plan. If the addict determines the benefits will outweigh the costs, his behavior becomes rational in his mind.
Apply this theory to the habit of smoking cigarettes. Studies have found that when price increases are announced in advance on cigarettes, cigarette consumption tends to go down. Smokers apparently realize that the cost of the habit will soon outweigh the benefits, so the habit rationally decreases in frequency.
The theory also suggests that the addiction is self-reinforcing. If a person gets a high off a drug or other habit, he is more likely to engage in the activity again because he knows it leads to positive feelings. If that is the case, a rational addict will understand the importance of complete abstinence from the habit if he wants to really break the addiction for good.
Placing a rational reasoning behind what appears to be an irrational behavior doesn’t set well with every scientist who has studied the reasons behind addiction. Economist Ole Rogeberg has called the theory “absurd” and explains that using economic theories to explain welfare analysis is misplaced and based on widely inaccurate assumptions. Thomas Schelling, another economist with a Nobel Memorial Prize in Economic Sciences under his belt, told The Slate Murphy and Becker “don’t know what they are talking about.”
The theory runs into problems when it comes to some of the realities of addiction. First, most addicts will not be able to predict the cost of their habit that far into the future. Another problem is that Rational Addiction theory is based on the assumption that future behavior coincides with current attitudes or desires about the behavior. This assumption has been proven false time and time again, by those who wish to kick their habit and are unable to do so.
While Rational Addiction theory sounds good from an economist’s point of view, it may not transfer well to real world addiction issues. However, as another component in understanding how and why addiction occurs, and how to stop it, this theory has proven valuable to some addicts and those trying to help them overcome their behavior.